South Korea’s clothing industry seeks growth momentum online
Whether it is eye-catching commercials, new models of purchasing while watching dramas, or in-depth cooperation with Chinese e-commerce platforms, they all prove the intention of Korean fashion companies to find growth momentum online in 2016.
A popular commercial
Recently, an advertisement from the SSG online store became “popular” in South Korea. In the advertisement, in front of the SSG building of Shinsegae Complex, Korean star Kong Hyo-jin asked Kong Yoo how to pronounce “SSG”. Gong Yoo replied “swish”, Kong Hyo-jin nodded, and then said, “Buy a coat with a ‘swish’ sound.”
This advertisement has attracted much attention as the first commercial to promote an “online comprehensive shopping mall” in the New World. Coincidentally, Samsung C&T, Hansen, etc. have begun to actively invest in online comprehensive shopping malls, and Korean fashion group LF has also achieved certain results from this strategy.
The measures taken by fashion companies to test the waters are mainly to attract the growing “thumb family”. Factors such as the aging of department stores and the stagnation of street business districts have led to negative growth in offline physical sales, while online sales have maintained a high growth momentum. Especially with the popularity of smartphones, mobile shopping has become a general trend. According to statistics, in July 2015, the transaction volume of mobile shopping in South Korea exceeded 2 trillion won for the second time since 2013, and the proportion of mobile shopping has reached 46.1%.
Paying attention to the online market also plays a decisive role in opening up the global market for brands. The development of the Internet and mobile phones has diluted the boundaries between countries. For purchasing agents who prefer Korean products, online shopping malls are a good choice. Especially in the Chinese and Southeast Asian markets, for fashion companies, the online market may be the outpost to achieve internationalization goals.
Exploring the outpost of internationalization
Unlike the model in which distribution companies enter the online market or conduct business indirectly through venture capital companies, Korean fashion companies now bring together various scattered brands and operate comprehensive online shopping malls in a systematic management manner.
Among them, the most representative one is New World Group. New World has integrated a series of online shopping malls such as emart shopping mall and New World shopping mall into SSG comprehensive shopping mall, that is, you can directly purchase products from department stores and supermarkets in the SSG online shopping mall, and the product scale is also considerable.
In October last year, Hansen established thehandsome mall and set a sales target of 100 billion won within five years. This is also Hansen’s first time involved in online sales. This move can further shorten the distance between customers and the brand and attract young customers aged 20 to 30. Thehandsome shopping mall brings together 8 brands including time, system, and SJSJ, as well as 8 international brands including chloe and MM6. In addition, imported clothing collection stores tomgreyhound and mue are also located here.
In September last year, Samsung C&T established an online shopping mall that integrates different brands such as beanpole and 8seconds, and established an online shopping mall called “SSFshop”. The online mall LFmall, which has long been famous as a comprehensive shopping mall, has maintained a double-digit growth rate every year since 2010. In particular, the mobile mall achieved a growth rate of 400% last year.
SKfashionmall, the online shopping mall of SK Networks, a subsidiary of SK Group, also maintains a strong growth trend. Last year’s growth rate doubled compared with the same period. SKfashionmall has attracted many new customers by gathering emerging brands such as SteveJ&YoniP, SJYP, and American Eagle.
Differentiated content attracts consumers
For a long time, fashion comprehensive shopping malls have often attracted consumers with special online products, mainly using videos and other means to attract consumers to visit the website to achieve promotions. Samsung C&T uses “web TV series” as a tool to attract young consumers aged 20 to 30 who mostly shop online and on mobile phones. By actively investing in online comprehensive shopping malls, Samsung C&T’s online sales increased by 75%, and the number of website visits also increased by more than 30%.
Indeed, strengthening communication channels through “web TV series” is becoming a new trend. In the Korean drama “Yellow”, the new function of checking and purchasing at any time while watching TV is very popular among young people. To this end, New World Group has expanded 6 online dedicated logistics centers and carried out large-scale promotional activities through TV advertisements and other forms. Those humorous series of commercials have received strong responses from consumers. According to statistics, New World Advertising’s click-through rate on YouTube is as high as 800,000 times. From December 31, 2015 to January 15, 2016, sales increased by 20% in just half a month compared with the same period. Advertising The effect is very obvious.
LFmall is increasing the pace of expanding the online market through the video shopping concept. LFmall cooperated with East Asia TV to shoot a series of short videos to display product information and matching methods. Consumers can obtain fashion inspiration by watching model displays, and can also purchase directly through the phone, Internet and mobile phones.
Compared with price war, Hansen prefers to adopt the strategy of differentiation of online and offline products to launch online limited edition products. Thehandsome launched a series of “system conspiracy” T-shirts that are 20% to 30% lower than the market price. They were sold out in just two weeks.
New World International attracts brands such as VOV and GAP to settle in SSG shopping malls.The Korean brand designunited’s online shopping mall also officially opened in July last year. Making full use of the Internet and SNS marketing to quickly increase the number of visitors and sales has become the main means for these online shopping malls.
Entering the Chinese market online
Korean fashion companies’ initiatives to expand their online businesses can be seen as preparations to achieve their internationalization goals. Compared with directly operating physical stores, fashion companies mostly use low prices to secure the market and increase brand awareness through online publicity.
Samsung C&T introduced six of its brands to the Chinese e-commerce platform Tmall in December last year, and launched large-scale promotional activities on Juhuasuan and Tmall International. For more than 600 products on the Juhuasuan platform, the entire process from order placement to receipt can be completed in just 5 days.
In order to promote the outdoor brand lafuma to successfully enter the Chinese market, LF signed an exclusive business agreement with Tmall in 2015 and carried out promotional activities through Weibo and other SNS means.
In addition to Tmall, Chinese e-commerce platforms such as Xiupin, Shangpin, and Jumei have also extended olive branches to Korean fashion companies. It can be predicted that in the near future, the number of cooperation cases between Korean fashion companies and China’s e-commerce distribution field will further increase.
Industry insiders believe that “if Korean fashion companies have a robust online circulation system, they can realize the strategy of expanding the Chinese and Southeast Asian markets at low cost, especially under the influence of the Korean Wave effect, they can enter the Chinese and Southeast Asian online markets. It will be the best choice.” South Korea’s clothing industry looks for growth momentum online
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